My wife and I (filing joint, standard) are close to the 2023 income limit ($218,000) to be eligible to contribute fully to each of our Roth IRA's. We both have corporate jobs where we contribute to 401k, HSA pre-tax, and employer sponsored medical plans. We are on separate health plans because for individuals they are the same price, but our employers add a fee when you add family members, so it's cheaper to stay individual.
Some quick hitters:
I maxed out my 401k ($22,500) and HSA ($3,850).
My wife did not max out her 401K or her HSA ($2,725).
Our only income is our corporate jobs and some small interest & dividends.
AGI - $204,046
W-2 Box 1 Wages - $202,106
Passive Income (Interest & Dividends) - $1,940
MAGI - ?
AGI - $204,046
Passive Income or loss - $1,940
IRA contributions -$0 so far, but want to contribute $13,000 ($6,500 each) for 2023 to Roth IRA
This is where my questions comes into play.
1. Does passive income need to be added back in for MAGI? It was not a deduction in our AGI and we did not have any passive losses. If added back in, that feels like double counting the passive income to me.
2. Does the IRA contribution for the MAGI calculation refer only to traditional IRA contributions made pre-tax? We do not have any traditional IRA accounts, so that would not apply to us. Or does it also refer to Roth IRA contributions made post tax? If it includes Roth IRA, then that would be up to $13,000 added back to our MAGI which would put us very close to the Roth IRA income limit for 2023. Since Roth IRA is post-tax and wasn't a deduction in our AGI, I'm hoping it is not added back to MAGI.
For both of my questions, I'm leaning towards they won't impact our MAGI, but I'm just looking for some confirmation.
Thank you!
